Alvopetro Energy grows production, expands into Canada through new partnership - ICYMI

Alvopetro Energy Ltd (TSX-V:ALV, OTC:ALVOF) CEO Corey Ruttan talked with Proactive about the company’s strong fourth-quarter and full-year 2024 results, highlighting a 37% production increase in early 2025.

He attributed this to the successful redetermination of the Caburé asset and the development of the Murucututu asset in Brazil, which led to an upgraded gas sales agreement with Bahiagás.

Ruttan also discussed Alvopetro’s expansion into Canada through a strategic partnership with a private operator.

Proactive: Hello. You're watching Proactive. Joining me is Alvopetro Energy CEO Corey Ruttan. Corey, very good to speak with you on your fourth-quarter and full-year 2024 results. It looks like a successful year in terms of increasing your productive capacity. That positions you well for 2025, right?

Corey Ruttan: Thank you. We just announced our 2024 results. We continue to generate industry-leading operating netback margins and very strong operating netbacks. We grew our productive capacity through 2024 on our key assets in Brazil.

Firstly, we had a successful redetermination on our core asset, the Caburé unit. Secondly, on our 100% owned Murucututu asset, we brought a well into production successfully. That allowed us to upgrade our gas sales agreement with Bahiagás late last year. We increased our firm sales under that agreement by 33% and adjusted the pricing structure so it is now calculated quarterly based on Brent oil and Henry Hub prices.

As a result, in January and February, we averaged 2,375 barrels of oil equivalent per day, which is a 37% increase over the fourth quarter. So we’re looking forward to an exciting 2025.

Take us through some of the other financial highlights for 2024, because cash flow was particularly strong.

Yes. A key advantage of our gas sales agreement in Brazil is that we are selling gas at over $10 per MCF. Our operating netbacks are over $59, and in the fourth quarter, our operating netback margins were between 86% and 90%, which is really industry-leading.

This strong cash flow allows us to follow a unique capital allocation model: half of our cash flow is returned to stakeholders, and the other half is reinvested in organic growth. Because of our production increase, we also announced an increase in our dividend to $0.10 per share on a quarterly basis.

You also recently announced your entry into Canada, and that’s been progressing well.

Yes, we are very excited about this. We announced our strategic entry into Canada on February 5, 2025, in partnership with a highly experienced private operator. We’ve already drilled the first two wells—open-hole multilateral wells with six horizontal legs each.

In total, we have drilled over 15 kilometers of open hole to maximize reservoir contact. These wells were completed on or under budget, and we expect production results in the next 30 days.

Corey, you mentioned a strong start to the year with a 37% increase in production. How do you see the rest of the year playing out?

Based on our firm sales commitments, we expect to maintain this level of production. Our goal is to build additional productive capacity through our drilling program in Brazil, which could lead to further increases in our firm sales commitments next year.

We are also focused on building a production platform in Canada. With strong cash flow and high-return investment opportunities in both Brazil and Canada, we are well positioned to deploy capital efficiently.

Quotes have been lightly edited for clarity and style